The U.S. Chamber of Commerce thinks that we could address the jobs crisis and spur economic growth if only we’d reduce regulation and sign more trade agreements. It sounds like the Chamber’s policy experts attended the Theodoric of York College of Economic Medicine.

Theodoric, you may remember, was the medieval barber-doctor played by Steve Martin on “Saturday Night Live” who stuck with his archaic therapies even though they kept killing his patients.

The Chamber is advocating similarly bad medicine. Loose regulation is what got us into this mess in the first place, but the Chamber and conservatives in Congress still believe that we can deregulate our way out of it. That belief is, of course, absurd on its face.

And whatever you may think about trade generally, the fact is that new trade agreements are not going to miraculously open the door to a near-term resurgence of U.S. exports and create the demand for goods and services that we need to put Americans back to work.

So forget about the leeches and bloodletting. There’s no shortage of good ideas on how to create millions of jobs and ensure a robust, sustained recovery. Here are five ideas which together comprise the Economic Policy Institute’s American Jobs Plan.

First, we can create nearly 1 million jobs by extending unemployment benefits and COBRA health coverage for one year. Congress is set to pass a two-month extension. This is a particularly effective way to create jobs, because it gets cash to people who are most likely to spend it, creating demand for goods and services in their communities. And that demand is what businesses need to see before they’ll start hiring again.

Second, we should provide additional relief to state and local governments, which are facing enormous budget shortfalls brought on by catastrophic revenue collapses. Budget aid prevents layoffs in the public sector, but also has a major impact in the private sector, since businesses provide many services on behalf of states, cities and towns.

Third, we can make further investments in infrastructure, as the president has proposed. If we spend $30 billion to put people to work repairing and modernizing schools, for example, we’ll create nearly a quarter of a million new jobs.

Fourth, we can create jobs simply by … creating jobs. For $40 billion, we can put 1 million Americans directly to work in public service jobs, improving their communities.

Finally, we can offer employers a tax credit for hiring. This last piece is intended to complement the others; by taking the four steps outlined above, we will create the demand for goods and services that employers need to see before they’ll hire. Coupled with increased demand, this tax credit will give employers an incentive to hire quickly.

Spending roughly $400 billion on these five proposals would create at least 4.6 million jobs in one year. 

The predictable argument against a plan like this is that we can’t afford to do it. In fact, we can’t afford not to do it. We simply cannot address the deficit without first creating jobs and ensuring a sustained economic recovery. By far the biggest factor contributing to the spike in the budget deficit this year is that the recession has led to massive job losses and, consequently, reduced tax revenues. 

The Recovery Act — which, although it was not big enough, has nevertheless been effective in creating jobs and pulling the economy out of its sharp descent — accounts for only 12.5 percent of the increase in the deficit. And without it, the economy and the long-term budget outlook would both be in far worse shape today than they are.

{mosads}Once the economy has strengthened sufficiently, we should put the nation on a path to long-term fiscal balance. But with the economy emerging from its worst recession since the Great Depression, now is not the time to worry about deficit reduction.

After killing another patient, Theodoric began to have a revelation. “Perhaps I’ve been wrong to blindly follow the medical traditions and superstitions of the past centuries!” he wondered aloud, before concluding, “Naaah!”

Fortunately, we don’t have to take outdated, disproven advice about how to properly cure the economy and create jobs. We can enact job-creation measures that we know will work, if done on a large enough scale to have a major impact. For the long-term health of our economy, we should ignore the Theodorics.

Mishel is president of the Economic Policy Institute. For more information, visit www.americanjobsplan.org .